There are two things that every WoW character has: a hearthstone, and a backpack. Well, some bank alts might have destroyed their hearthstone, actually, but absolutely everybody has that 16-slot backpack occupying their first bag slot. 16 slots made some sense back when that was also the biggest size bag that wasn't crazy expensive, back in classic WoW (Traveler's Backpack/Mooncloth Bg). But now that 16-slot bags are dirt-cheap, 18-slotters are reasonable, and 20- and even 22-slotters are obtainable, and especially moving forward into Wrath with the basic tailored bag being 20 slots, the backpack's 16 is starting to look a bit puny by comparison.
This leads one to ask: when are we going to be able to upgrade the darned thing? I'd love to be able to grab a few extra slots by trading it in for an 18- or 20-slot bag. And it really doesn't make sense for our backpack to be the smallest holding container on our body. I mean, I like that everybody starts out with a free decent-sized bag, but it really should just act like any other bag slot after that. Someone asked the same question in the WoW forums recently, and Zarhym responded in a non-committal fashion, saying they were thinking about it but didn't have anything to report just yet. Personally, I don't see the downside of transforming the backpack slot into a regular bag slot, but there may be something going on behind the scenes that I'm not aware of. It is also worth noting that we will be freeing up a few bag slots already in Wrath with our non-combat pets, mounts, and tokens leaving the inventory, not to mention bigger bags being available. Still, it seems like one can never get enough space.